Just 1,314 are enrolled in Pennsylvania program for high-risk patients.

Health care pools, run by states and the federal government to provide coverage at reduced rates for people whose illnesses have locked them out of private insurance, aren't proving as popular as policy-makers had hoped.

One reason? Underneath the gift-wrapping, the plans are too expensive for many to afford.

In Pennsylvania (http://www.mcall.com/topic/us/pennsylvania-PLGEO100101000000000.topic), just 1,342 have enrolled as of October in the state's PA Fair Care, which has the capacity to serve almost three times as many this year. And according to the state's insurance office, Pennsylvania's program is decidedly more popular than its counterparts around the country.

Across the Delaware (http://www.mcall.com/topic/us/delaware-PLGEO100100300000000.topic) River, New Jersey (http://www.mcall.com/topic/us/new-jersey-PLGEO100100700000000.topic) has only received 150 applications for 20,000 slots. Ohio (http://www.mcall.com/topic/us/ohio-PLGEO100103800000000.topic) had hoped to get 400 enrollees a month for its plan, but September only saw 225; October, just 158.

The U.S. Department of Health and Human Services (http://www.mcall.com/topic/health/u.s.-department-of-health-human-services-ORGOV0000126162.topic) wouldn't release numbers on the federal program, but those who monitor the insurance industry say it's hardly faring any better.

"We're kind of surprised at the low take-up so far," said John Greene, vice president of congressional affairs at the National Association of Health Underwriters.

Acknowledging that the plans are expensive and have requirements that some people can't meet, he said many people don't even know they're available because they haven't been widely advertised.

"Education is a real uphill battle. I think the numbers will go up over time, the longer it's out there and the more people get to know about it," Greene said.

Part of the historic health care reform (http://www.mcall.com/topic/economy-business-finance/financial-business-services/healthcare-access/health-care-reform-%282009%29-EVHST0000197.topic) legislation passed earlier this year, the high-risk pools bridge the gap until 2014, when a rule prohibiting insurance companies from discriminating against people with pre-existing health conditions takes effect. Given the option of developing an independent program to serve the need or signing onto the federal equivalent earlier this year, Pennsylvania and 27 other states chose to go their own way.

Funded by a $160 million federal grant, PA Fair Care offers coverage for $283 a month. [That's not bad compared to my Blue Cross plan at $386/mo, with no pre-existing conditions ... and Medicare at $329/mo.] While the cost is far below what private insurers would charge, it's more than many people can afford. The program has enough money to serve 3,500 people this year before jumping to 5,300 in 2011.

Judging by the current rate of applications, there will be plenty of open slots for some time.

"We didn't know what to expect," Insurance Department spokeswoman Melissa Fox said. "Let's face it: A success would be having one person covered."

To qualify in Pennsylvania, you must be a resident, have been uninsured for six months and have a pre-existing medical condition. Unlike Pennsylvania's plan, the federal plan requires documentation from a private insurer that an applicant was denied or offered incomplete coverage because of an illness.

That's a big stumbling block nationally.. Many patients don't have that documentation handy, necessitating another round of applications and denials by private insurers before they can sign on to the government plan. State officials also think many potential applicants don't meet the six-month requirement and are waiting before applying.

The next hold-up is price. Pennsylvania's charge of $283 a month regardless of age is competitive compared to New Jersey's rates, which go from as low as $212 a month for patients under 25 up to $768 for those over 65. The federal plan charges between $320 and $570 a month, depending on the state.

That's much cheaper than private plans for sick patients, which can hit $1,500 a month. But it's still far above typical rates — a healthy person can get individual coverage for about $75 a month, [Would have to be for a very young person for such a low premium. Or perhaps that figure is for very minimal coverage?] Greene said — and often out of reach for poorer families.

"That's been a complaint from the beginning," Greene said. "They say, 'Oh good, I can get in,' but when they look at what it costs, it's still not affordable."

As Doug Anderson, chief of policy at the Ohio Department of Insurance, said, it's been a long slog letting patients know the program even exists. He's largely relying on word of mouth and referrals from hospitals, a strategy mirrored in Pennsylvania and New Jersey.

"We initially relied on unpaid media to get the word out," he said. "We also did a radio campaign around the state. But we did not go paid TV or paid newspapers. What we were told from the people who do high-risk pools is that you need to do targeted outreach."

State officials all say the same thing: Give us time. The patients will come. Christmas isn't over yet.

"It just happened this summer," said Marshall McKnight, spokesman for the New Jersey Department of Banking and Insurance. "It's very early. The word is still getting out."

Now, eight months into the new law there is a growing frenzy of mergers involving hospitals, clinics and doctor groups eager to share costs and savings, and cash in on the incentives. They, in turn, have deployed a small army of lawyers and lobbyists trying to persuade the Obama administration to relax or waive a body of older laws intended to thwart health care monopolies, and to protect against shoddy care and fraudulent billing of patients or Medicare (http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/medicare/index.html?inline=nyt-classifier).

Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses.

Lobbyists and industry groups are bearing down on the Federal Trade Commission and the Justice Department, which enforce the antitrust laws, and the inspector general’s office at the Department of Health and Human Services (http://topics.nytimes.com/top/reference/timestopics/organizations/h/health_and_human_services_department/index.html?inline=nyt-org), which ferrets out Medicare fraud.

Those agencies are writing regulations to govern the new entities, known as accountable care organizations. They face a delicate task: balancing the potential benefits of clinical cooperation with the need to enforce fraud, abuse and antitrust laws.

“If accountable care organizations end up stifling rather than unleashing competition,” said Jon Leibowitz, the chairman of the trade commission, “we will have let one of the great opportunities for health care reform (http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/health_insurance_and_managed_care/health_care_reform/index.html?inline=nyt-classifier) slip away.”

The overall problem, which some anticipated, was that the bureaucrats who would be writing the regulations that implement the law would be the large difference in what the law "appeared" to be, and what it became in reality.

It takes a bureaucrat 78 pages to write the regulation that guarantees all patient visitors equal visiting rights (primarily implemented to accommodate gay patients & visitors). I read the introductory paragraphs, and they read like a legal brief.

Johns Hopkins Medicine, which operates a hospital in Baltimore and 25 clinics in Maryland, has just acquired Sibley Memorial Hospital in Washington, 16 months after acquiring Suburban Hospital in Bethesda, Md.

“This is being driven largely by health care reform, which demands an integrated regional network,” said Gary M. Stephenson, a Johns Hopkins spokesman.

Can a regional network really be sensitive to the local nuances within a large region?

In upstate New York, three regional health care systems are seeking federal permission to merge their operations, which include hospitals, clinics and nursing homes (http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/nursing_homes/index.html?inline=nyt-classifier) in Albany and surrounding counties.

Begins to sound like the structure of a govt system ... except retaining the profit aspect. If it turns out that these mega-medical systems don't work as intended, how will they be parsed later?

With potential efficiencies come incentives for doctors and hospitals to control costs, and a potential for abuse. Judith A. Stein, director of the nonprofit Center for Medicare Advocacy (http://www.medicareadvocacy.org/), said she was concerned that some care organizations would try to hold down costs by “cherry-picking healthier patients and denying care when it’s needed.”

Under the law, Medicare can penalize organizations that avoid high-risk, high-cost patients.

Peter W. Thomas, a lawyer for the Consortium for Citizens with Disabilities (http://www.c-c-d.org/index.htm), a national advocacy group, expressed concern about the impact on patients.

“In an environment where health care providers are financially rewarded for keeping costs down,” he said, “anyone who has a disability or a chronic condition, anyone who requires specialized or complex care, needs to worry about getting access to appropriate technology, medical devices and rehabilitation. You don’t want to save money on the backs of people with disabilities and chronic conditions.”

Nearly one-fourth of Medicare beneficiaries have five or more chronic conditions. They account for two-thirds of the program’s spending. [Interesting statistic ... 25% of the beneficiaries consume 67% of the spending. All this talk about leading a healthier life: result seems to be that those who do it may live longer & require less care until the body simply gets old enough that it breaks down, no matter what you do.]

“In some markets,” Ms. Gilbertson said, “the dominant hospital is like the sun at the center of the solar system. It owns physician groups, surgery centers, labs and pharmacies. Accountable care organizations bring more planets into the system and strengthen the bonds between them, making the whole entity more powerful, with a commensurate ability to raise prices.”

She added, “That is a terrible threat.”

Doctors and hospitals say the promise of these organizations cannot be fully realized unless they get broad waivers and exemptions from the government.

Begins to sound like a govt system, which would be exempt from monopoly laws, except without removing the profit element?

Hospitals and doctors have also asked the administration to waive laws intended to prevent fraud and abuse in Medicare.

In a recent letter to federal officials, Charles N. Kahn III, president of the Federation of American Hospitals (http://www.fah.org/fahCMS/home.aspx), said, “To provide a fertile field to develop truly innovative, coordinated-care models, the fraud and abuse laws should be waived altogether.”

So that's how we fix Medicare?

One of the laws, intended to protect consumers, says that a hospital cannot knowingly make a payment to a doctor “as an inducement to reduce or limit services” to Medicare or Medicaid patients. Hospitals that do so, and doctors who accept them, are subject to civil fines up to $2,000 per patient and can be barred from Medicare and Medicaid.

Other laws broadly restrict financial relationships between hospitals and doctors. With some exceptions, it is a crime to pay “any remuneration” intended to induce or reward the referral of Medicare and Medicaid patients to a particular care provider.

A major purpose of accountable care organizations is to encourage doctors to work closely with selected hospitals, and the rewards paid to doctors — typically, a percentage of the money saved — could run afoul of this law, hospitals and doctors say.

Oops ... somebody failed to be familiar with existing law as they wrote the new one.

Dr. Donald M. Berwick (http://topics.nytimes.com/top/reference/timestopics/people/b/donald_m_berwick/index.html?inline=nyt-per), the administrator of the Centers for Medicare and Medicaid Services (http://www.cms.gov/), hails the benefits of “integrated care.” But, Dr. Berwick said, “we need to assure both patients and society at large that destructive, exploitative and costly forms of collusion and monopolistic behaviors do not emerge and thrive, disguised as cooperation.”

It should take a couple of thousand pages to say that in the regulations!